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"The Khoisan is the only authoritative voice which can talk about land," she said to loud applause and some cheers.

The woman said the Khoisan were the "first freedom fighters" who fought the colonials when they came here 360 years ago.

"We were the first people of this nation. We were the first people of southern Africa and we still face oppression."

She said the country's history did not start in 1910 when the ANC was formed.

"We lived here and you, your ancestors, and the white ancestors found us here. Only we can talk about land ownership."

Self isolation

Malema told the woman that he thought she was "extremely missing a point".

"Me and you are Africans and this land you are referring to and the whole of Africa was one thing until the colonialists came to divide us.

"So you must never see yourself as being something different from what I am."

He said she was "inviting self-isolation".

Malema said the black African majority and the Khoisan were one.

"I'm not from Europe, my ancestors are not from Europe. This Africa belongs to Africans and that's what the Khoisan are."

Malema was taking part in a debate with scenario planner Clem Sunter in Cape Town, a day after the State of the Nation address.

Without compensation

Malema on Friday told Cape Town heads of industry that land expropriation without compensation was needed in South Africa.

"The state must take a deliberate decision to nationalise the land and redistribute it for equal use [for everybody]," Malema told members of the Cape Chamber of Commerce and Industry (CCCI) over dinner at the Cape Sun hotel.

Executive Director of the CCCI Sid Peimer opened the bout saying that it was essential for business to come to terms with different future scenarios and how it would affect business opportunities and job creation.

Malema said the willing buyer-willing seller model initiated by the ANC-led government was flawed.

"If people want to buy the land and there is no willing seller we will never own a piece of land ... it does not matter how much money we have," he said.

"The economy is the land, the economy is the mines and resources, there is no food without the land."

According to Malema there was a need for the expropriation of land without compensation to address South Africa's increasing inequality gap.

He sketched a future scenario in which legislation would be passed in Parliament indicating that the state was the owner of the land and "the land shall be allocated to people who have indicated what they want to do with the land" and a decision made on whether that was in the public interest.

Small business

The main thrust of Sunter's argument was the development and promotion of entrepreneurship in South Africa.

He said a million new businesses were needed to create five million jobs.

According to Sunter the high level of mechanisation in the modern economy has removed a high level of jobs out of the system and the employment model has changed resulting in high levels of contract labour.

Sunter proposed that every big business should have 20% of its supply chain devoted to nurturing the new generation of small businesses.

"We should identify in every township economy the top 1000 entrepreneurs and advise them on how to extend their business into the mainstream economy... we have to focus on small businesses," he said.